Confidence in the equipment finance market dropped sharply in April, hitting its lowest level since October 2023, according to the latest Monthly Confidence Index for the Equipment Finance Industry (MCI-EFI) released Thursday by the Equipment Leasing & Finance Foundation.

The index fell to 41.9, down from 58.1 in March. The report reflects industry leaders’ outlook on current and future business conditions, compiled from a survey of executives in the $1.3 trillion equipment finance sector. Nearly half of the responses were submitted prior to the Biden administration’s April 2 tariff announcement, which several respondents said is fueling economic uncertainty.

“Turbulent times… doom and gloom mixed with increased opportunities,” said Charles Jones, senior vice president at 1st Equipment Finance, Inc. “Tariffs could lead to higher prices for parts and equipment, but also ‘creative’ financing to help borrowers offset costs.”

Only 15.4% of executives expect business conditions to improve in the next four months, down from 28.6% in March. Nearly 58% believe conditions will worsen, more than triple the previous month’s figure.

Demand for leases and loans to fund capital expenditures is also expected to decline. Just 11.5% of executives anticipate increased demand, down from 32.1% last month. Meanwhile, 61.5% expect a drop in demand, more than double March’s 25%.

Access to capital remains stable for most, with 88.5% reporting no change, but hiring expectations cooled. About 23% plan to add staff, down from 32.1% in March.

Executives expressed a range of views in commentary included with the report. “New business volume was strong for Q1… although market uncertainty persists,” said David Normandin, president and CEO of Wintrust Specialty Finance. James Jenks, CEO of Global Finance and Leasing Services, pointed to unclear tariff timelines as a near-term drag on the economy.

Jonathan Albin, chief operating officer at Nexseer Capital, said, “I’m optimistic because demand remains steady to strong at the moment, but I have concerns that at some point the various headwinds will have an impact.”

The full MCI-EFI report, including detailed methodology and historical data, is available at leasefoundation.org.